Geopolitics

Basques Vote Gives Big Boost To Independence

EL PAÍS, VANGUARDIA, CORREO (Spain), GUARDIAN (U.K.), DER SPIEGEL (Germany)

Worldcrunch

BILBAO - Two Basque independence parties have triumphed in regional elections in northern Spain’s Basque country this weekend, the latest sign of growing separatist sentiment in crisis-plagued Europe.

The two parties together took nearly two-thirds of the vote, 48 of the 75 Basque legislative seats being contested. The Basque country, currently the most prosperous region of Spain with a long and sometimes violent movement for independence, already has its own police force, parliament and president.

According to the Vanguardia, a Catalan newspaper, the results show the victory of the moderates in the independence movement.

The second-largest vote was for the EH Bildu, a separatist coalition including the political wing of the ETA, which renounced terrorism last year and was thus allowed to field candidates for the election.

The second party, PNV or Basque Nationalist Party, is also in favor of some form of autonomy from Spain, the Guardian reports. The former ruling party, the socialist PPOE party, got 16% of the vote and the conservative party of current Spanish Prime Minister Mariano Rajoy only 10 %, reports El País.

The new prime minister of the Basque country is 52-year-old Iñigo Urkullu, an abertzale, or Basque independentist since the age of 16. He has called for a “bilateral relationship” with Spain.

A former teacher and career politician, Urkullu “leaves nothing to chance, always knows what he wants,” comments El País. PNV president Andoni Ortuzar declared that “the results mean that this country wants to advance toward building a nation and social development, leaving the crisis behind, and that it wants a peaceful way to independence,” reports Basque country newspaper El Correo.

Rajoy's conservative party, which won a victory in another northern region, Galicia, this weekend, has vowed to stop any moves toward independence on the part of the Basque country or Catalonia, where polls show a narrow majority in favor of independence from Spain, the Guardian said. The Catalans are voting in November on a referendum for independence.

In recent weeks, one million Catalans marched for independence from Spain, a Scottish referendum for independence from the U.K. has been scheduled for 2014, and Flemish nationalists made advances in a municipal election in Belgium earlier this month, electing a separatist mayor of Antwerp, Belgium’s largest city, reports Der Spiegel.

Even German-speaking South Tirol, which was incorporated into Italy from Austria in 1918, and whose unemployment rate is only 4%, is complaining about being part of debt-ridden Italy. Der Spiegel notes that secession from any member country would present the European Union with a thorny question: would the new nation also be part of the EU?

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!
THE LATEST
FOCUS
TRENDING TOPICS
MOST READ